How Richard Donaldson of eBay Has Driven Up Utilization of Internet Infrastructure

I spoke to Richard Donaldson, the Director of Infrastructure Management and Operations at eBay. Donaldson is tasked with transforming the technical operations consumed by the various business units and subsidiaries of eBay into Internet services. He is also a Board Member and Vice President of DatacenterPulse and former Consultant at Peak Hosting. In the following brief interview, he talks about the biggest challenges he faces when developing a lean infrastructure program, the importance of digital transformation, how his team has driven up the utilization of Internet infrastructure and more.

Dan Schawbel: What are the biggest challenges you face when developing/implementing a lean infrastructure program?

Richard Donaldson: The biggest challenge we have faced thus far is simple inventory management – truly understanding what you have, what it is being used for, and then optimizing that utilization. We started this effort a few years ago and called this Project Linnaeus (named after Karl as we were developing a new taxonomy for the states of use in inventory). What we first did was develop a Fleet Allocation Index (FAI) to simply measure what was allocated to actual work and what was not. Our discovery was that we were at a 63% FAI, meaning 37% of our compute was not being used for actual work – since then, we have gotten our FAI up to just under 90%. This was a source of a lot of stranded capital and we have saved/avoided tens of millions in just optimizing there. It was also the first step in our journey towards “just in time inventory” for without super accurate inventory management, you will not really get towards a lean infrastructure.

Schawbel: How is digital transformation changing the face of operations, its role and how it aligns with the business?

Donaldson: I strongly believe that the web scale company (those companies operating at the scale of Internet) infrastructure operations are making huge strides in traditional supply chain and asset management due to the need to keep control of costs since the modern company is built now on Internet infrastructure (21stcentury electricity), it is necessary to fully optimize that utility spend. Therefore, those companies leading that charge are the ones who have and continue to operate that infrastructure and all are moving in a lean direction.

Schawbel: As you drive up the utilization of Internet infrastructure, what are your biggest challenges in continuing to drive down costs?

Expanding above – we have driven up utilization by focusing heavily on accuracy in managing our existing inventory and ensuring we track every item – server, CPU, memory, disk, bandwidth, etc – and to then create models for highly accurate 12-18mos forecasting so we can plan our capacity delivery/ordering in a very “just in time” manner. Second, we are also focusing on our SW being more and more resilient versus buying more redundant capacity, and 3rd, ensuring we have proper workloads matched to one of our two SKUs – e.g., CPU or Mem heavy apps are matched to our Performance SKUs and our data storage or data processing are matched to our Big Data SKUs.

Schawbel: What are your thoughts on citizen development and how it can support infrastructure management and operations with proper tools and governance?

Donaldson: We are very active “citizen developers” in fact so much so, that part of our hiring of new, college grads is to ensure that they have coding skills as a table stake. I think developing tools to help be more productive is a part of what we do now collectively, since programming is becoming “more democratized” and easier for all, that relying on traditional development teams to get those tools to us is legacy and takes too long, quite frankly.

Schawbel: How have you seen attitudes grow and change in regards to the utilization of the cloud from its beginning, to wide spread adoption, given your long and varied roles in Silicon Valley?

Donaldson: I think that the “cloud” is a bad term – Internet infrastructure is simply the new, ubiquitous utility (see Nic Carr’s The Big Switch) – the providers of this utility will continue to consolidate and eventually boil down to just a handful – these will be the first ever, true global utilities. I think Google, Microsoft, and Amazon are those providers, with most others falling to the side in time – within datacenters, the core foundation, the two of consequence are really only Digital Realty and Equinix – there may be regional players for some time, but not anyone to compete against those two. I don’t see them in the next decade moving up the stack (yet), but on a long enough time line, they should. In the mean time, more and more businesses will move to leverage one of the three infra players mentioned, leveraging some hybrid model. The economics simply necessitate this move much like the electrical utility developed.

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